Summary
Church & Dwight Co., Inc. (CHD) reported net sales of $1,325.1 million for the three months ended June 30, 2022, a 4.2% increase compared to the prior year. For the six months ended June 30, 2022, net sales grew 4.5% to $2,622.3 million. Despite top-line growth, net income decreased to $187.1 million ($0.76 per diluted share) for the quarter and $391.5 million ($1.59 per diluted share) for the six months, compared to $218.3 million ($0.87 per diluted share) and $439.0 million ($1.76 per diluted share) respectively in the prior year. This decline in profitability is attributed to increased manufacturing, transportation, and commodity costs, which compressed gross margins. The company is actively managing inflationary pressures through price increases and productivity programs, though some discretionary brands have seen a demand shift. Management believes its value-oriented portfolio positions it well for potential economic downturns. Significant financial activities during the period include the issuance of $500 million in 5.00% Senior Notes due 2052 and the entry into a new $1.5 billion unsecured revolving credit facility. The company also continues its share repurchase program, with $729.7 million remaining authorization as of June 30, 2022.
Financial Highlights
53 data points| Revenue | $1.33B |
| Cost of Revenue | $779.80M |
| Gross Profit | $545.30M |
| R&D Expenses | $27.20M |
| SG&A Expenses | $180.80M |
| Operating Income | $261.60M |
| Interest Expense | $19.30M |
| Net Income | $187.10M |
| EPS (Basic) | $0.77 |
| EPS (Diluted) | $0.76 |
| Shares Outstanding (Basic) | 242.60M |
| Shares Outstanding (Diluted) | 246.40M |
Key Highlights
- 1Net sales increased by 4.2% to $1,325.1 million in Q2 2022 and by 4.5% to $2,622.3 million for the first six months of 2022, driven by pricing/product mix, partially offset by volume declines and foreign exchange fluctuations.
- 2Gross profit decreased by 1.2% to $545.3 million in Q2 2022 and by 0.5% to $1,097.8 million for the first six months, with gross margin declining due to higher manufacturing, transportation, and commodity costs.
- 3Income from operations decreased by 12.4% to $261.6 million in Q2 2022 and by 9.8% to $542.3 million for the first six months, reflecting compressed margins and increased SG&A expenses.
- 4Net income per diluted share was $0.76 for Q2 2022, down from $0.87 in the prior year, and $1.59 for the first six months, down from $1.76.
- 5The company issued $500.0 million of 5.00% Senior Notes due 2052 and entered into a new $1,500.0 million unsecured revolving credit facility.
- 6Cash and cash equivalents increased significantly to $639.7 million as of June 30, 2022, compared to $240.6 million at the end of 2021, driven by financing activities.
- 7The company is experiencing significant supply chain and inflationary pressures, leading to price increases and efforts to manage costs, while also noting a demand shift towards value products.